NEW YORK (USA TODAY) -- It's been a day of fresh milestones on Wall Street, with
the Dow Jones industrial average topping 15,000 for the first time in
history and the Standard & Poor's 500 index making its first foray
above the 1,600 level.
Following a far better-than-expected number on job creation
last month, the benchmark Standard & Poor's 500 stock index rallied
above the 1,600 level Friday to another record high, eclipsing that
psychologically important milestone for the first time.
are breathing a little easier "that the sky is not yet falling on the
U.S. economic expansion," says Scott Anderson, chief economist at Bank
of the West.
The bullish reaction to the strong jobs number was
evident in a sharp rise in the Dow, which was up as much as 175 points
in early trading.
"It's been a long time coming," says Howard
Silverblatt, senior index analyst at S&P Dow Jones Indices, noting
that it took "13 years, one month and 11 days" for the S&P 500 to
climb the 100 points from 1,500 to 1,600.
"The payroll number was a surprise to the upside," says Steven Ricchiuto, chief economist at Mizuho Securities USA.
Street, which had been expecting only 148,000 jobs to be created last
month, got 165,000 instead, and must now adjust their investment
outlook. They had been betting that the economy and jobs market were
weakening after some less-than-stellar economic data in recent weeks.
better-than-expected 165,000 increase in non-farm payrolls in April,
combined with the 114,000 upward revision to the gains in the preceding
two months, will go a long way toward soothing fears of another spring
slowdown," says Paul Ashworth, chief U.S. economist at Capital
If there's one negative to today's strong jobs report,
it is that it could prompt the Federal Reserve to dial down its
easy-money policy earlier than expected, Ashworth said. "With the
unemployment rate edging down to a four-and-a-bit-year low of 7.5%, the
Fed may yet begin to slow the pace of its asset purchases sometime in
the second half of the year."
Even so, "we remain fully invested
in U.S. stocks," said David Kotok, chief investment officer at
Cumberland Advisors, who favors growth stocks over defensive shares. "We
think the U.S. stock market is headed higher."
JOBS: Economy adds 165K jobs in April, jobless rate falls to 7.5%
of the April employment report, stock index futures were flat. After
the better-than-expected announcement, futures took off, and when
trading opened, stock prices followed.
Thursday, the Dow rose 0.9% to 14,831.58. The S&P 500 index rose
0.9% to 1,597.59. The Nasdaq composite index climbed 1.3% to 3,340.62.
separate report from the Labor Department on Thursday showed that
applications for unemployment benefits fell last week to the lowest
level in more than four years.
Markets in Japan were closed for a
public holiday on Friday. Elsewhere in Asia, stock market advanced. Hong
Kong's Hang Seng rose 0.22% to 22,718.76.
An interest rate cut by
the European Central Bank gave markets in Europe a small lift Thursday.
The central bank, which sets interest rates for the 17 European Union
countries that use the euro, cut the rate by a quarter of a percentage
point to a record low of 0.5%. Markets across the region were trading in
a narrow range on Friday.
Benchmark oil for June delivery rose
44 cents to $94.43 per barrel in electronic trading on the New York
Mercantile Exchange. The contract rose $2.96, or 3.3%, to finish at
$93.99 a barrel on the Nymex on Thursday, the biggest one-day gain for
crude since November.